Early in chapter 4, Abu-Lughod writes about the Italian city-states Genoa and Venice: “Each was a vanguard. Geographically, each tried to reach as far as possible in Asia. Institutionally, each tried to devise better ways to do business, to accumulate larger amounts of less risky capital, to administer companies, and to monopolize the markets for commodities and money” (Abu-Lughod 102-3). This is an excellent summary of the two Italian heavyweights, and—continuing in the chapter—she writes that the two city-states played an undeniably important role in the “global” economic system, as they served as middle-men for the system and “connect[ed] the cultural islands of the thirteenth-century world system” (103).
Obviously, the two city-states were both critically located on the Mediterranean, and both developed and employed state-of-the-art navies and economic systems as a result. However, I think there is another—possibly more important—reason why Genoa and Venice grew to be such great powers. We know that Venice and Genoa were rivals. And we also know that Venice emerged victorious (in the sense that it became the more-dominant of the two city-states). Rhetorically asking, why was this so?
Abu-Lughod writes that Venice and Genoa developed differently concerning the relationship between capitalism and the respective city-states (113-4). In Genoa, individual citizens and parties (i.e. families, &c.) “were more involved than the state in direct investment,” and was also fractured with inter-family feuds and other competitive struggles that resulted from the more personalized capitalistic system (I’m thinking of Shakespeare: “Two households, both alike in dignity, In fair Verona [replace with Genoa], where we lay our scene, From ancient grudge break to new mutiny, Where civil blood makes civil hands unclean.”)
Venice, on the other (and cleaner) hand, was largely free from the feuds and civil struggles that were common on the rest of the Italian peninsula (114). Thus (Abu-Lughod purports), Venice was much closer to state capitalism with “a strong subcomponent of individual enterprise.”
Venice finally emerged victorious in 1381, and “[t]he Peace of Turin bequeathed the Mediterranean and in particular the oriental trade to a Venetian monopoly” (120). Was the catalyst of Venice’s victory the fact that they had a state capitalistic system, as opposed to a decentralized system? Perhaps. And is this lesson in history analogous to the 15th century onwards, where the European powers’ (Britain, Spain, France, Portugal, &c.) respective governments strongly backed their economic systems, thus emerging hegemonic?